Don't Bank Your Retirement on Your Business

Investing in your own business makes sense. Many businesses achieve significant growth each year. However, when you consider that many small businesses fold every year, it becomes clear that banking your retirement solely on the success of your business might not be the best idea. There is no guarantee that your business will continue to grow or even maintain its current value. If your business is worth less than you were counting on at the time you planned to retire, you could be forced to continue working or sell it for less than what you were expecting.   Business owners often assume that their businesses will be their main source of retirement funds, but that strategy can be riskier than you think. It’s generally not wise to put all your eggs in one basket. Broadly diversifying your assets may help protect against risk.   Diversification involves dividing your assets among many types of investments. Putting all your money into a single investment is risky because you could lose everything if the investment performs poorly — even if that investment is your own business. Of course, diversification is a method used to help manage investment risk; it does not guarantee against the risk of investment loss.   Consider what would happen if you were planning to rely solely on the sale of your business to fund your retirement, only to have the U.S. economy fall into a recession about the time you planned to retire. If one occurred when you planned to retire, it could affect the sale of your business or the income it generates for you.   Likewise, there is no assurance that a larger competitor won’t overtake your market, or that demand for your business’s goods and services won’t weaken because of new technology, rising energy prices, consumer trends, or other variables over which you have no control.   Your business is almost certain to provide some of the money you need to retire. By building a portfolio outside your business, you are helping to insulate your retirement from the risks and market conditions that can affect your business.    This material was written and prepared by Emerald.

Income for the Risk-Averse

A Potential Income Source for the Risk-Averse

A survey of investors 65 and older found that 17% were unwilling to take on any investment risk.¹ Another 19% said they were willing to take only below-average risk, even though they knew it meant they were giving up the opportunity to pursue higher-than-average investment gains.²

Yet 58% of people in this same group also said their investment goals included generating current income.³ How is it possible to generate a retirement income without taking on too much risk? One way is by investing in fixed-income instruments, usually debt securities. But even these instruments pose some risks that investors may not be comfortable with.
An alternative is to purchase a long-term retirement income vehicle from an insurance company. Although no financial instrument is entirely without risk, the guarantees offered by a fixed annuity can help address the concerns of even the most risk-averse investors.

Fixed for Life

An annuity is a contract with an insurance company that provides a guaranteed income at some point in the future, after the contract has been funded with premium payments. If you are concerned about earning the highest possible investment return, an annuity may not be for you. But if you are interested in a guaranteed income or a guaranteed interest rate, you may want to consider the role an annuity could play in your portfolio.
Annuities are flexible and can be shaped to help meet your individual needs. For example, you could choose an income that lasts for a specified period, for the rest of your life, or for the lives of you and another person. Or you might choose to earn a specific rate of return for a guaranteed period, possibly with the opportunity to lock in a higher rate, depending on market performance.
The amount of income paid by an annuity depends on variables that include the amount paid in premiums, the contract’s rate of return, the age and gender of the contract holder, and the number of years over which income payments will be received.
Annuities have contract limitations, fees, and expenses. Any guarantees are contingent on the claims-paying ability of the issuing insurance company. Most annuities have surrender charges that are assessed during the early years of the contract if the contract owner surrenders the annuity. Withdrawals prior to age 59½ may be subject to a 10% federal income tax penalty. The earnings portion of annuity withdrawals is subject to ordinary income tax.
A source of guaranteed income may help remove some of the uncertainty associated with volatility in the financial markets. It’s possible that annuitizing a portion of your savings may allow you to enjoy your retirement years with less concern that you might outlive your money.

1–3) Investment Company Institute, 2008

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2010 Emerald.

Legacy Retirement Advisors Celebrates 10 Years In Business

LEGACY RETIREMENT ADVISORS CELEBRATES 10 YEARS IN BUSINESS




PASO ROBLES, September 01, 2010 – Legacy Retirement Advisors, a retirement planning & investment services organization in the Paso Robles area, celebrates its 10 years of service for the community. The firm specializes in helping local residents meet their unique retirement needs, through comprehensive planning and investment recommendations. The Financial Advisors at Legacy Retirement Advisors are affiliated with LPL Financial, the nation’s largest independent broker/dealer*.

(As reported by Financial Planning magazine, June 1996-2010, based on total revenue.)

“We are pleased to be part of this community and look forward to continuing to support it with high standards of service and thoughtful, personalized financial advice,” says Jennifer Langstaff, LPL Registered Principal and co-owner. “We are celebrating the entire month of September with free retirement reviews, special educational workshops and client events. We will also have a special raffle of two (2) complimentary adult passes to Hearst Castle during the month of September.”

Legacy Retirement Advisors has several associates dedicated to helping retirees and pre-retirees achieve their financial goals for independence and protection. In addition to a broad range of skills and experience, many of the firm’s associates have earned advanced insurance and professional designations.

Jennifer Langstaff has been a member of the industry for over 18 years, with particular expertise in Retirement Planning. Active in industry organizations, she is a member of Paso Robles Chamber and president of a local chapter of Business Networking International. She has also been active in the community through the PRWCA, Paso Robles Children’s Museum, Quota Club International, Paso Robles Library and Trinity Lutheran School. A Graduate Estate Planning Consultant, Jennifer holds Series 6, 63, 65, 7, 24, & 36 securities registrations through LPL Financial and is registered to transact business in the states of CA, MI, UT, FL, HI, AR, TN.

In recognition of its exceptional service to clients and highly successful support of the company and production level, the Paso Robles office has been honored with LPL Financials Freedom Club recognition for the each of the past 10 years.

To schedule a complimentary financial planning consultation or to find out more about their September events, call 805-226-0445. To learn more about Legacy Retirement Advisors and how its members can help you with your financial goals, visit their web site at www.LegacyCentralCoast.com.